AM Best Revises Outlooks to Negative for The Brethren Mutual Insurance Company

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of The Brethren Mutual Insurance Company (Brethren) (Hagerstown, MD).

The Credit Ratings (ratings) reflect Brethren’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Brethren’s revised ratings outlooks to negative from stable reflect deterioration in the company’s operating performance metrics, which have been driven primarily by an influx of weather-related events and have contributed to underwriting losses in each of the last three years. Brethren has been proactively taking corrective actions including implementing new business moratoriums, coverage restrictions, deductible changes and non-renewing policies with poor loss experience; however, results have continued to trail the composite. Continuation of these trends would likely lead to a revision in AM Best’s adequate operating performance assessment. The very strong balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The neutral business profile reflects the company’s market leading position in its top line of business, and farmowners’, in its core states, Maryland and Delaware. In addition, the company has a modest amount of geographic diversification with a spread of risks between commercial, farm, home and auto. AM Best considers Brethren’s ERM program to be appropriate for its risk profile and includes comprehensive risk management.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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